A surge in earnings by the biggest banks at the end of last year made 2011 the most profitable time for the industry in five years. More earnings and fewer troubled banks suggest the industry has healed since the 2008 financial crisis.

The financial headlines of the last several months have shown large banks making near-record profits, and small banks being closed at a pace of three or four per week. The FDIC has released its comprehensive report on the industry for the third quarter, and it confirms that fairly positive assessment.

Nouriel Roubini, the renowned NYU economics professor with the nickname "Dr. Doom," has offered up another dire prediction: Even if the U.S. and Europe manage to avoid a double-dip recession, it will still feel like a recession, and more than 400 U.S. banks will likely fail.

The FDIC says the number of troubled financial institutions and bank failures are increasing, but the number of loans 90 days or more past-due has declined for the first time in four years. FDIC chair says "This is the best quarterly profit for the banking sector in almost three years."

The U.K.'s Financial Services Authority slapped JP Morgan Securities with a hefty fine Thursday after it was revealed that the bank had co-mingled customers' futures and options account funds with its own money for seven years.

Agency infighting and regulators' disregard of shoddy lending practices allowed Washington Mutual Bank, which failed in 2008, to continue to make high-risk mortgage loans and sell them as securities into the market, a Senate investigative subcommittee reported Friday.

The big national banks get most of the attention, but it turns out that small banks are even more interested than their larger competitors when it comes to snapping up failed former rivals. Some 46% of small banks say they're interested in bidding for failed banks' assets or deposits, compared with just 36% of large banks.

The Congressional Oversight Panel's December report on TARP concluded that it "proved decisive enough to stop the panic and restore market confidence," but failed to address many of the "ongoing problems" in the financial markets and the broader economy. However, it didn't call for ending the program.

It's no secret that one of the biggest dangers facing banks today is that loans to builders of office towers, malls and other commercial properties are going sour at a quickening pace. Financial regulators, including Fed Chairman Ben Bernanke and Federal Deposit Insurance Corp. chief Sheila Bair, have warned of the risk.